The City's Pulse Newsletter
Tax Increment is Not Complicated!
Our lives are full of complex issues, but “tax increment”, which is the kind of money used by LCDC to fund urban renewal projects, is not difficult.  Understanding the concept is easy if you ignore the layers of big words LCDC likes to use in describing tax increment; they want it to be intimidating.

Let’s use a local, real-life example to illustrate tax increment:

First, get a map and take a big pen and draw a line around downtown CdA, way up NW Blvd., and up 4th Street.  This is one of our urban renewal districts.

Second, freeze all the property taxes on every single house, building or bare land inside those lines at 1997 levels, because that is when this district was started.  

Third, for every year, send only the 1997 level of tax money to the city, county and other taxing entities. 

But remember, the taxes for all the property in the district still go up every year, just like everyone else’s, so take all the increases in taxes over the 1997 level and send them to the LCDC.  This increase is called the tax increment.  Easy.

For the year 2008, the LCDC received a tax increment of almost $5 million dollars.

The unelected board of LCDC has complete control over how that public money is used and this district will go out to the year 2021.

Why do I mention this subject right now?  Well, last week in the CdA Press, there was a column, not mine, about urban renewal that misdefined the tax increment, so I wanted to clarify the information.   But, while the column was wrong about tax increment, it was right about the importance of a legal case now sitting before the Idaho Supreme Court.

The legal challenge in question started in Southern Idaho and seeks to clarify whether urban renewal agencies are alter egos of the city or whether they are fully independent municipal bodies.  This is important.

If they are ruled to be alter egos of the city, they could be struck down as an illegal method for cities to get around laws requiring a public vote before big public expenditures.  Any debt carried by URAs might be declared invalid, and that’s what some banks are worried about.  

If the State Supreme Court rules that urban renewal agencies are separate and fully independent, then they are home free.  Too free, actually.  There would be huge questions of accountability.  Who supervises these boards?  The cities or the state?  Or do they operate by using tax money and have no oversight at all?
Just so you know, both LCDC and the City of CdA gave many thousands of our public dollars to help pay for what’s called an “amicus brief”, also called a “friend of the court brief”, to push in favor of the urban renewal agencies being independent.  Our tax dollars at work.

On a somewhat related subject, if you would like to read about some little-known “public amenities” provided by tax increment money to LCDC, check out our web site by clicking this link:  You will find info on where you can park downtown for free, a lovely patio you can enjoy all day long and a beautiful bathroom to visit!  

Have a great weekend and enjoy the wonderful weather. --Mary

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Mary Souza has been a concerned citizen of CdA for over 20 years. She's a local small business owner, former P&Z Commissioner and wrote an opinion column in the CdA Press on local issues.  Her opinions are her own.

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